What is a Board Resolution?

A board resolution is a formal document that records a specific action or decision approved by your company's directors. It serves as legal proof that the board has given its consent for your company to undertake a particular action, such as opening a bank account, appointing a new director, or selling company shares.

When is a Board Resolution Required?

A written resolution is required for most significant corporate actions, including but not limited to:

• Appointing or resigning directors, auditors, or the company secretary.

• Opening, closing, or changing signatories for corporate bank accounts.

• Allotting or transferring shares.

• Changing the company's registered address.

• Amending the company's constitution.

• Approving annual financial statements.

Key Components of a Board Resolution

A properly drafted board resolution should be unambiguous, concisely outlining all key decisions. As a guideline, ensure your board resolution follows this structure:

• Title: A clear heading, such as "Directors' Resolution in Writing."

• Date: The date the resolution is proposed.

• Resolution number: Assign your resolution a unique case number for your records.

• Company details: The full name of your company and its Unique Entity Number (UEN).

• Preamble: A brief introduction explaining the resolution’s purpose and its importance to your company.

• Resolution: The core component of your board resolution, this is split into two key parts:

  • Statement: “Board Resolution of [your company] seeking the approval [...]”

  • Issues and sub-issuses that are solved: Start the statement with “RESOLVED”, followed by the decision made.

    • Eg: RESOLVED, the proposed budget of SGD 10,000 to onboard X tool to accelerate Y goal.

• Signatures: Create spaces for relevant board members to sign their approvals.

• Effective date: Indicate the date on which the resolution becomes effective.

The Process of Passing and Documenting a Resolution

Once you’ve drafted your board resolution document, you have to authorise it. Below are the steps you need to take:

1. Issue a notice of meeting: Schedule the board meeting and notify all board members accordingly.

2. Conduct the meeting: Execute the meeting and ensure all necessary parties are present.

3. Present the resolution: Showcase the resolution to board members.

4. Discuss the resolution: Give the board members an avenue to discuss and ask questions about the resolution.

5. Hold a vote: Perform a vote in accordance with your company’s bylaws.

6. Record the final verdict: Your corporate secretary records the vote results along with the meeting minutes.

7. Get the resolution signed: The resolution must be signed by all directors to be valid. Each signature should be accompanied by the corresponding director's printed name.

8. Filing and record keeping: Once signed, the resolution becomes an official company record. It must be filed in your company's minute book. Depending on the nature of the resolution (e.g., a change in directors), a corresponding filing must also be made with ACRA.